BRITISH AMERICAN TOBACCO P.L.C. 
LONDON (Reuters) - British American Tobacco (>> British American Tobacco) said new U.S tax rules would boost its earnings per share by 6 percent in 2018, supporting its commitment to high-single-digit earnings growth and greater investment in vaping devices.
Jefferies analysts estimated the 6 percent benefit equates to around 400 million pounds ($541 million), or about 2 percent of sales, and suggested the investment could help BAT compete against Philip Morris International (>> Philip Morris International) in the growing market for cigarette alternatives seen as less dangerous than smoking.
"A key factor weighing on the multiple relative to Philip Morris has been a feeling that they are trailing in reduced risk," the analysts said, noting that 2018 will be a "huge year" in shaping the competitive environment for so-called reduced risk products.
Philip Morris and BAT are expected to roll out their respective cigarette alternatives in more markets, including possibly the United States, the world's biggest market for such products.
BAT, the maker of Lucky Strike and Dunhill cigarettes said on Tuesday that the changes would also result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances arising from its acquisition of Reynolds American last year.
BAT's shares were up 1 percent at 0926 GMT in London.
(Reporting by Paul Sandle and Martinne Geller; editing by Kate Holton and Louise Heavens)
